House Passes 4.1% Raise For Federal Employees

Rules That Require Outsourcing Are Killed

The House yesterday approved a 4.1 percent pay raise for federal civilian employees and killed new rules designed to speed Bush administration efforts to require federal workers to compete with the private sector for their jobs.

The proposed raise, included in the $89.3 billion Transportation/Treasury appropriations bill the House approved 381 to 39 yesterday, rejects a two-tiered plan by President Bush that would give an increase of 4.1 percent to the military but 2 percent to civilian employees. Lawmakers argued that Congress should uphold the tradition of "pay parity" and grant equivalent increases in base pay to the military and the civil service.

"Pay parity is a principle that Congress consistently follows as a matter of fairness, and it is also an effective method of ensuring that we retain quality federal employees," said Rep. Steny H. Hoyer (D-Md.), who has many federal workers in his district. "A fair pay adjustment is especially urgent at this time when federal employees are working so hard to keep America safe."

The bill also includes a 2.2 percent pay raise for members of Congress, which would boost most lawmakers' annual salaries to about $158,000 next year.

The Senate appeared to be on a similar track over federal employee pay. The Senate Appropriations Committee last week approved a 4.1 percent increase for the 1.8 million federal civilian workforce. No date has been set for a full Senate vote.

Although Bush officials opposed the higher pay raise, it was the changes to the president's "competitive sourcing" initiative that drew a veto threat even before the bill's passage.

Bush believes requiring federal workers to compete for their jobs promotes efficiency, even if the positions stay in-house. Critics, including employee unions and many Democrats, say the president merely wants to farm out jobs to reward his business allies.

The changes to his program came in an amendment by Rep. Chris Van Hollen (D-Md.) that passed 220 to 198. It would require federal agencies funded by the House bill to toss out newly revised Office of Management and Budget regulations governing competitions between federal and private workers, and return to an older set of rules. The Senate bill does not contain similar language, but federal employee union officials said they would work to get it in.

The new OMB rules, approved in May and known as Circular A-76, "tilted the playing field very much in favor of privatization and against federal employees," Van Hollen said in an interview after the vote. He said the government needs to "go back and review the A-76 provisions and come up with a system that's balanced and fair."

Opponents of the amendment said such a requirement could hinder the "competitive sourcing" initiative government-wide.

"The taxpayers save money every time we go through the competitive sourcing process," said Rep. Ernest J. Istook Jr. (R-Okla.). "Effectively this amendment would kill competitive sourcing."

Rep. Thomas M. Davis III (R-Va.), chairman of the House Government Reform Committee, said the Bush policy has problems, but that the OMB revised the rules following months of comment from all affected parties. Another OMB rewrite "could be more onerous," Davis said, "and we couldn't stop that."

OMB officials pressed hard for the May revisions, which are expected to reduce to 12 to 18 months job competitions that often took two to four years to complete. The changes also made it harder to define jobs as "inherently governmental" (and therefore protected from contracting out) and wiped out a requirement that contractors cost at least 10 percent less than the in-house bid.

In a statement of administration policy issued before the vote, OMB officials said, "Now is the wrong time to short-circuit implementation of this principle" of competition.

Federal employee union leaders applauded the House action on all counts.

"This is the pay raise that should have been supported by the president long ago and will be very much appreciated by the federal employees," said Colleen M. Kelley, president of the National Treasury Employees Union.

As for the rule changes, she said: "We'll have to wait and see. We think it means a halt to the competitions. . . . Even if they want to proceed with competitions under the old rules, they would have to stop and analyze all of the competitions that are underway to make sure they meet the old criteria."

John Gage, president of the American Federation of Government Employees, said the House had demonstrated bipartisan opposition to Bush's "privatization agenda."

"The American taxpayers are footing the bill whether federal employees or contractors are providing government services," Gage said. "They should be getting the best deal for their hard-earned dollars."

In another blow to the administration, neither the House nor the Senate appeared likely to grant Bush's request to create a $500 million "performance fund," which agencies could tap to reward their civilian workers with higher raises.

In still another slap to the administration, the House appropriations bill effectively lifted restrictions on travel to Cuba and caps on the amount of money that can be sent to households in Cuba from sources in the United States -- both steps the White House opposed.

The House bill lifts the constraints by preventing the use of federal funds to enforce travel restrictions and the sending of money to Cuban households